BUSI 1307 Chapter 5 Quiz

The loss in the value of an automobile over time is called: ​maintenance. ​the loan payment. ​the sales price. ​ the purchase commission. ​depreciation.

Which of the following is true of buying a used car as compared to a new car? ​A used car will be in a better mechanical condition compared to a new car. A used car will depreciate at a lower rate compared to a new car. ​The accessories in a new car will be better updated compared to those fitted in a new car. ​Purchasing a used car will be less expensive as compared to purchasing a new car. ​The fuel efficiency in a used car is always higher compared to that of a new car.

When shopping for a lease, you want: ​a high capitalized cost ​a low capitalized cost. ​a high money factor. ​a low residual value. ​high lease payments

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months. Based on this information, which of the following housing recommendations would be most appropriate for them? ​Renting a home ​Buying a condominium ​Buying a single-family dwelling ​Buying a cooperative apartment ​Purchasing a trailer

_____ is a situation where homeowners owe more to lenders than what their properties are worth. ​A negative equity ​A foreclosure ​An adverse rent ratio ​Inflation ​A real estate short sale

As home prices have fallen in recent years, the rent ratio: ​and rent affordability have increased. and rent affordability have decreased. ​has increased and rent affordability has decreased ​has decreased and rent affordability has increased. has increased and rent affordability has stabilized.

If you made a down payment of $11,000 on a house worth $110,000, the lenders will require _____ as a result of the size of the down payment. ​closing points ​a bond ​mortgage insurance ​application fees ​homeowner's insurance

An escrow account is used to collect _____ from one's monthly mortgage payment. interest​ ​principal real estate taxes​ ​closing costs ​operating expenses

The majority of each monthly payment at the beginning of the loan goes to pay the: ​principal. ​interest ​real estate taxes. homeowner's insurance. ​private mortgage insurance.

Which of the following are tax deductible if one itemizes deductions? Principal, interest, real estate taxes, and insurance ​Principal, interest, and real estate taxes ​Principal and interest ​Interest, real estate taxes, and insurance ​Interest, insurance, and real estate taxes

For most homeowners, the most important financial benefit from owning a home is that it is: ​a security for loans. ​an inflation hedge ​a tax shelter. ​a cash flow item. ​a psychic income.

_____ are the up-front, one-time costs of home ownership. ​Points ​Closing costs ​Property taxes ​Insurance costs ​Mortgage interests

A lender will usually require a loan-to-value ratio of _____ or less for you to avoid having to pay private mortgage insurance (PMI). ​75% ​80% ​85% ​90% ​95%

A real estate sales contract will include: ​the amount you have paid as an earnest money deposit. ​the terms of a mortgage loan taken from a third party. ​deed restrictions. ​the market value of the property. ​the current value of the cost of repairs on the house.

Barb and Bob want to purchase a new home but don't know how much mortgage they can qualify for. The lender requires that the total installment loan payments do not exceed 35% of the monthly income. Based on Barb and Bob's financial data given below, what is the maximum monthly mortgage payment for which they can qualify? Monthly Gross Income $4,000 Car payment $350 Student loan payment $200 ​$1,400 ​$1,208 ​$1,208 ​$850 ​$500